Shane Ross (Independent)

I thank Senator Norris for sharing time.

This Bill is the culmination of much work done over a period of time and in that sense, it is welcome. Five or six years ago, Senator O'Toole and I pointed out the chaos that existed in the auctioneering world. This was not remedied by the fact that auctioneers and estate agents had their own regulating bodies. I know of the IAVI and the IPAV and there may be others. They added nothing apart from a fig leaf of protection for auctioneers. The situation was better when there was no regulation whatsoever because the IAVI and IPAV gave a semblance of respectability to auctioneers and created the impression that they were being regulated by bodies which allowed them to go into the auctioneering jungle and do what they liked. They were clubs. They did virtually nothing to discipline their members and allowed them to run riot.

What was worse was that anyone over the age of 18, without a criminal record and able to get an insurance indemnity and put down £12,000, could go to the District Court and get an auctioneering licence. I know this because I did it. I never practised but I got a licence because I could not believe it was so easy. I took a bank draft for £12,000 to the District Court in Bray, a garda came to my house to check that I was alive and in good health and spoke to me for a few minutes, and a judge accepted my application and wished me well in my new career. It is a career which I have not yet pursued but I intend renewing the licence in case things do not go quite as I anticipate in this House in the next few years. That is an indication of the ease with which anyone could practise as an auctioneer. That went on for years uncorrected. It has taken six years, an auctioneering group, committees, bodies and promises from the former Minister, Mr. Michael McDowell, for the Bill to reach this stage. Limited as it is, the Bill is welcome.

I have worries about why the Bill took so long and about certain things it does not contain. We must not underestimate the auctioneering lobby, which is very powerful in these Houses. When I counted in the last Seanad, the number of Members with auctioneering licences was in double figures. No other industry, profession or vocation could claim so many Members of the Oireachtas among its membership. There are huge numbers of auctioneers in the Dáil and on county councils. The political clout of auctioneers and estate agents, who are without qualifications, is formidable. I presume they still do not require qualifications because none is specified in the Bill.

People who could neither read nor write could become auctioneers. This meant they could go off into the property jungle, find a few victims and value, sell or buy their houses with no expertise whatsoever. It also meant they could handle money. One of the most iniquitous practices of estate agents is the taking of booking deposits. A purchaser of a house may give an estate agent a booking deposit of, perhaps, 10% of the purchase price. The estate agent then places this money in a client account. The money is being handled by a person without any qualifications to handle money, or anything else. A booking deposit has no legal standing whatsoever. It entitles the purchaser to nothing. When an auctioneer receives a booking deposit he normally takes the property off the market and puts up a "Sale Agreed" sign. However, if anyone else makes a bid an unscrupulous auctioneer, which a large number of them are, can sell the property to that person and simply hand back the booking deposit. A deposit given at an auction when an agreement is signed is completely different. A booking deposit paid on a private house sale has absolutely no legal standing. If an auctioneer is honourable he will not sell a booked property to anyone else, but he can, and they do. Gazumping often happens in those cases.

It is vital the new authority, which the Bill will establish, sets very high standards, particularly of education and expertise. If people like me, who have not a clue what the value of a house is, are allowed to get auctioneering licences, there will still be unscrupulous and inexpert people in this market. The Bill will have got us nowhere. It simply gives the regulatory body the power to change. We are putting a huge amount of faith in the regulatory body. Furthermore, while I do not cast aspersions on any Minister in this regard, we are making a great leap of faith that the Minister will appoint the right people to this authority. For God's sake, the Minister should not appoint people from the industry because they all have vested interests. The auctioneering industry has been a complete and utter disgrace in its self-regulation. It has been a case of cowboys regulating cowboys. The discipline imposed upon auctioneers and estate agents by these bodies is laughable. Everyone knows the abuses which took place in this business in good times and bad.

Senator Norris referred to the advent of AMV, advised market value, which has been a slight change for the better but it was preceded by guide prices which were the most misleading prices possible. They were deliberately pitched low to get people into the auction room. They were deliberately pitched at a level such that the suckers would come in and call on their solicitors and surveyors to attend and pay them significant sums to show up at the auction and carry out a survey of the house respectively. However, such people would arrive at an auction only to find out that the guide price was considerably below the reserve price. It was an utterly unscrupulous piece of salesmanship, targeted at gullible people and approved of by the IAVI and the IPAV, the two auctioneering regulatory bodies. There is a great onus on the proposed authority to clean up the auctioneering stable and clean up this rotten system which has existed and been approved by the bodies which have affected to protect the consumer. Such bodies have simply and solely existed to protect the auctioneers when they got into trouble, which happened from time to time.

Let us consider an example of such trouble. In February 2007, shortly after things turned in the housing market and the boom was over - forgive me if I do not have the correct date - there was an incident in which sale prices appeared in the newspapers provided by auctioneers who were members of these regulatory bodies. Instead of providing guide prices which were too low for the purposes of a rising market, the prices of sales negotiated behind closed doors, rather than at auction, were the wrong prices. They were too high. This is all documented. The newspapers published prices which were higher than the actual sale price. The auctioneers were caught out by The Irish Times and they said the practice would stop.

The National Consumer Agency got wind of this, called in the auctioneers and demanded that the practice stop. It was the most outrageously dishonest attempt to mislead the market and to give the impression that the market was not falling as fast as it actually was. Then, instead of any prosecutions following, the National Consumer Agency got an assurance from the auctioneering bodies that such practices would not recur. How in the name of God did this occur? Is there any other sector in which no prosecutions would be taken but those involved would simply be rapped across the knuckles for misleading the public on such an important issue? I simply do not understand it. The clout these people have and the amount they have been allowed to get away with has been scandalous.

I hope the Minister will make serious appointments to the body. He should not appoint auctioneers who have proven to be flawed for decades in their judgments and self-regulation. He should not appoint party political people or country councillors with auction licences, but people who have independent consumer interests at heart. It is very important the Minister does so because if this body is to be serious and to have the credibility that the IAVI and the IPAV never had, it must have independent people putting into practice the measures we have discussed. These include measures on discipline, education and conduct in the auction room such that no fake bids are allowed, and that no mortgage brokers are allowed to be part of an auctioneering business where there is the conflict of interest to which other speakers, especially Senator Norris, referred. I call on the Minister to send the body forward from here with the instruction it will be watched very carefully, that it must not be politicised and that it must act in the interests of consumers and the buyers and sellers of houses.